Carnival (NYSE:CCL) and Bally’s (NYSE:BALY) Critical Comparison

Bally’s (NYSE:BALY) and Carnival (NYSE:CCL) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Risk & Volatility

Bally’s has a beta of 1.76, meaning that its stock price is 76% more volatile than the S&P 500. Comparatively, Carnival has a beta of 2.31, meaning that its stock price is 131% more volatile than the S&P 500.

Profitability

This table compares Bally’s and Carnival’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bally’s	-25.83%	-40.97%	-7.66%
Carnival	11.24%	26.11%	6.36%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Bally’s and Carnival, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bally’s	2	3	0	0	1.60
Carnival	0	5	21	1	2.85

Bally’s presently has a consensus target price of $11.75, indicating a potential upside of 30.63%. Carnival has a consensus target price of $35.08, indicating a potential upside of 51.25%. Given Carnival’s stronger consensus rating and higher possible upside, analysts plainly believe Carnival is more favorable than Bally’s.

Insider & Institutional Ownership

70.4% of Bally’s shares are owned by institutional investors. Comparatively, 67.2% of Carnival shares are owned by institutional investors. 69.3% of Bally’s shares are owned by insiders. Comparatively, 7.9% of Carnival shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Bally’s and Carnival”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bally’s	$2.45 billion	0.19	-$701.10 million	($6.80)	-1.32
Carnival	$27.31 billion	1.16	$2.76 billion	$2.22	10.45

Carnival has higher revenue and earnings than Bally’s. Bally’s is trading at a lower price-to-earnings ratio than Carnival, indicating that it is currently the more affordable of the two stocks.

Summary

Carnival beats Bally’s on 13 of the 15 factors compared between the two stocks.

About Bally’s

Bally’s Corp. is a global casino-entertainment company with a portfolio of casinos and resorts and online gaming businesses. It operates through the following segments: Casinos & Resorts, International Interactive, and North America Interactive. The Casinos & Resorts segment consists of the company’s casino and resort properties, a horse racetrack, and a golf course. The International Interactive segment includes the European and Asian operations of Gamesys, a business-to-consumer iCasino operator. The North America Interactive segment covers a portfolio of sports betting, iGaming, and free-to-play gaming brands such as Bally’s Interactive, SportCaller, and Live at the Bike, and the North American operations of Gamesys. The company was founded on March 1, 2004 and is headquartered in Providence, RI.

About Carnival

Carnival Corp. engages in the operation of cruise ships. It operates through the following business segments: North America and Australia (NAA) Cruise, Europe and Asia (EA) Cruise Operations, Cruise Support, and Tour and Others. The North America and Australia (NAA) Cruise segment includes the Carnival Cruise Line, Holland America Line, Princess Cruises, and Seabourn. The Europe and Asia (EA) Cruise Operations segment consists of AIDA, Costa, Cunard, and P&O Cruises (UK). The Cruise Support segment represents port destinations and private islands for the benefit of its cruise brands. The Tour and Other segment operates hotel and transportation operations of Holland America Princess Alaska Tours. The company was founded in 1972 and is headquartered in Miami, FL.